Motorola Is Committed to RFID

Jul 18, 2011—Last week, I visited the headquarters of Motorola Solutions for a media briefing with senior executives. Greg Brown, the company's chairman and CEO, addressed a group of approximately 20 reporters, explaining the markets that his company sells in, as well as why Motorola Solutions is well positioned for "5 to 8 percent" organic growth.

I asked Brown where radio frequency identification fits into his company's plans. He described Motorola's RFID business as "relatively embryonic," but added that "it's finally getting traction" since "the price and lifecycle economics" are improving. "It's growing strongly, but from a small base," he said. "It won't contribute materially to our bottom line for the next 12 to 18 months, but it is one of the top three or four priorities of this company."

I was surprised to hear the CEO of an $8 billion technology company say RFID is that high up on its priority list. Later in the day, I had a chance to sit down with Gene Delaney, Motorola Solutions' executive VP for product and business operations, and asked him what being in "the top three or four" means.

"RFID used to be part of another product organization," Delaney said. "Mike Poldino now has responsibility for the worldwide RFID business, and it is treated as a standalone business instead of as a subset of advance data capture."

The company is investing $1 billion in the research and development of new products, and RFID is receiving a portion of those funds. "The investment in RFID is not as big as other businesses, but in terms of [the size of the RFID market], it continues to be a sizeable investment in mobile RFID readers, fixed readers and handheld readers."

While RFID does not currently represent a material contribution to Motorola's sales and profits, Delaney said, "it does rep a material part of our portfolio when we are with customers, especially CIOs. What we are seeing is a lot of customers asking why they should revisit it. They've heard about RFID, and might even have been burned in the past, but we're saying they ought to take another look, because RFID is now targeted to solving problems."